Ballmer calls Apple a competitor for OS, but not smartphones

Microsoft's CEO told analysts in New York that the company sees Apple, as well …

Microsoft CEO Steve Ballmer spoke with analysts in New York yesterday, discussing the company's prospects in the current economic downturn. Though the easily excitable executive acknowledged that Windows faces serious competition from Mac OS X (as well as Linux and Google) in the operating system area, he continued to downplay Apple's iPhone as a serious competitor to Windows Mobile.

Ballmer told analysts, "We're very focused on both Apple as a competitor and Linux as a competitor." The company plans to launch Windows 7 in the beginning of 2010, at which time Apple will already have introduced the next version of Mac OS X, Snow Leopard. While Snow Leopard doesn't promise many whiz-bang new features as past releases have, it does focus on wringing as much performance as possible from Intel-based hardware while introducing under-the-hood architectural changes that should provide a platform for future innovation. Windows 7, on the other hand, seems more like the release that Vista should have been two years ago.

On the mobile front, Ballmer continued to dismiss Apple as a threat to Windows Mobile, despite Apple iPhone sales surpassing Windows Mobile late last year. "The truth of the matter is all the consumer market mojo is with Apple and to a lesser extent BlackBerry," Ballmer said. "And yet, the real market momentum with operators and the real market momentum with device manufacturers seems to primarily be with Windows Mobile and Android."�

Windows Mobile 6.5, which doesn't have features that compare to iPhone OS or Android, won't be released until the end of this year, of course. Windows Mobile 7 won't ship until some time next year. In the meantime, Apple will likely introduce a major revision to its iPhone OS this year, increasing the technology gap between it and Windows Mobile.

There is no question that Microsoft dominates many markets, but recent trends suggest that the company is losing ground on a number of fronts from both Apple and Linux. Though Microsoft has relied heavily on the momentum of its installed based to continue its dominance, Apple, Google, and others have instead out-innovated Microsoft, and it seems consumers will ultimately benefit from the increased competition for users' desktops and mobile devices.

For Microsoft, 1% isn't significant market share. Of course, you could argue that it's that attitude that has led to all of their troubles, but that's how Ballmer thinks. So by his own standards, his prediction wasn't wrong... at least, not yet.

There's the key line. Of course, it shows a total lack of understanding that Apple and RIM are their own device manufacturers, so it's not even a valid way to measure marketshare. If I made mobile phones, I wouldn't be looking into making a Blackberry or iPhone based device, either. Mostly because it's not a thing I would be able to do, because they aren't about to license their software to me.

Well, I think Ballmer sees the networks and device manufacturers as his potential customers, not end users. This is an interesting take but one that probably does reflect reality as MS cares about it more and more as phone OEMs develop their own user interfaces.

So in a sense, he does not have to compete with the iPhone as a platform (since he doesn't care about moving units) but he does have to compete with Android (since Android often runs on the same hardware as WinMo.)

But it is this type of thinking that will marginalize Microsoft to some extent. ActiveSync is the de facto standard for connecting cell phones to mail/calendar/contact lists though, so they do have a lot of clout in the smartphone space with that technology. Good leadership will leverage that, so look to Ballmer to ignore it.

Balmer is correct in a roundabout way. Microsoft is competing with Android to win over handset manufacturers who aren't making their own OS (Palm, Apple, RIM). If I'm trying to sell Windows Mobile, I first care about getting a handset manufacturer like Samsung or HTC to use it.

In the sense that Microsoft licenses Windows Mobile to other companies and doesn't make their own cell phones, and Apple doesn't license the iPhone OS and does make their own cell phone, Apple is not directly competing the Microsoft.

The same goes for RIM.

So yes, Microsoft Windows Mobile does have momentum over the iPhone OS. But only because they don't directly compete. Microsoft WISHES Apple would go head to head with them (as in, license the iPhone OS), as Apple would have to significantly compromise the capabilities of the OS, and developers of iPhone apps would have a more difficult time because of varying specs, and Microsoft could trivially undercut Apple on price.

Unfortunately for Microsoft, Apple won't play Microsoft's game. Hell, Microsoft primarily has only ONE licensee (which primarily makes phones that it sells to other companies to resell under their own brand name). And MS is directly competing with multiple open-source, some free as in beer, operating systems (so they can't undercut them on price, short of paying people to license Windows Mobile).

Originally posted by joehonkie:There's the key line. Of course, it shows a total lack of understanding that Apple and RIM are their own device manufacturers, so it's not even a valid way to measure marketshare. If I made mobile phones, I wouldn't be looking into making a Blackberry or iPhone based device, either. Mostly because it's not a thing I would be able to do, because they aren't about to license their software to me.

Except RIM does license the Blackberry platform, at least in parts. It's called BlackBerry Connect, and allows a number of BlackBerry enabled devices to connect to BIS and BES. In fact, there are Windows Mobile BlackBerry Connect devices!

OK, I understand that no one ever likes to mention this when talking about smart phones, but there are 2 important points here:

1) Where is symbian in this discussion? Licensed to other manufacturers, most used smart phone OS on the planet, but not very popular in the US. Whereas the iphone and windows mobile (and android, now that I think about it) are predominately US-centric.

2) There are many people out there that feel the iphone isn't a true smart phone, but rather a feature/smart hybrid. While I don't necessarily agree, there is a certain amount of logic here, as many smart phone capabilities are not present on the iphone. However, by the general belief that smartphones can run native code, neither android nor blackberry are smart phones, and the iphone is. Both blackberry and android (android for sure, blackberry last I checked) only allow managed code to run in a sort of virtual machine. Contrast this with the iphone OS, winmo, and symbian, where you CAN use managed code, but native code is the general rule.

In many ways, you have the Java camp (blackberry, android) and the native camp (symbian, winmo, iphone). Which are "true" smartphones and which aren't is sort of a pointless argument. They are all generally used in the same fashion, and they all have similar capabilities. Some are better at some things, others are better at other things, and it really all comes down to personal taste. While I'd never want an iphone, winmo device, or an android based device, I'd consider a blackberry, and I love my symbian phones (both UIQ and S60). But that's just me. For other folks, the choices come out differently, and I think that's fine. If nothing else, competition is good for all of us, in the end.

I just wish android would be opened up for real (read:native) development, rather than that ridiculous java based model they currently use.

Except RIM does license the Blackberry platform, at least in parts. It's called BlackBerry Connect, and allows a number of BlackBerry enabled devices to connect to BIS and BES. In fact, there are Windows Mobile BlackBerry Connect devices!

Right, but that's not what I'm talking about. Like other people said, for the OS->Phone market, RIM and Apple are going whole stack.

"And yet, the real market momentum with operators and the real market momentum with device manufacturers seems to primarily be with Windows Mobile and Android."

It's such poor English. What does "market momentum" mean anyway? Apparently, it doesn't mean doing well in the market. And why qualify it with "real" if it did mean something?

Then, having twice assured us of what's "real" why back off with a "seems to"? And what's the function of the "primarily" at all?

And wherever you see corruption of the language there's something up, as George Orwell saw so clearly:

quote:

... designed to make lies sound truthful ... and to give an appearance of solidity to pure wind.

If there is paraphrasable sense there it would be something along the lines of:

"Manufacturers of smartphones who are looking for operating systems are probably looking either to license them from us or to use Google's Android."

The answer to that is: So what? What's so special about "Manufacturers of smartphones who are looking for operating systems"? It's like saying you have X per cent market-share in digital audio players with a hard drive over Y GB and that come in brown - or whatever it was they said about the Zune.

Besides, there's Symbian, too.

There's also a hope that mobile networks will want what he's offering smuggled in there. Hence the verbiage about "real market momentum with operators" as well as "real market momentum with device manufacturers".

That's as may be.

I suppose he wants to make that hope sound rather more solid than a hope. That's for his audience. It doesn't mean it is.

Listen, I understand that as the CEO of Microsoft, Balmer pretty much has to frame things in the best possible light for Microsoft, and with a leaning towards their worldview and future plans.

However...

Stuff like this just borders on sociopathic. I mean, there's framing things in your point of view, and then there's just Baghdad Bob-style total refutation of reality. The iPhone isn't a serious competitor to Windows Mobile? Really?

I fail to understand why Microsoft shareholders continue to put up with this used-car salesman.

Besides the obvious mistakes (saying he does not compete with Apple, RIM, Palm and Nokia, which should mean he has given up already), he does not even give a hint on how he intends to compete, now that several mobile OSs that are years ahead of WinMob are free (as in beer), and it will be at least a year plus some millions in development cost to even remotely close that gap. The roadmap is: we will release something that is still far behind at the end of the year, and maybe something better sometime next year? Wow. He makes a serious effort to force OEMs on the Android bandwagon.

Of course he has to (try to) present MS in the most positive manner, but does he really expect analysts to be that dumb? Maybe OS X has only captured one additional percent, but it has captured much much more than that in the expensive part of the market (devices costing more than 1k) and in education (ergo, the money and the future)... how long until OEMs will look into alternatives, that will allow them to distinguish their products (to get back into that part of the market) and save the mandatory check to MS? Dell or HP already have to sell about four times the volume to match Apple's profits – for how much longer can and will they let that happen? Charging customers again for Vista SP2, rebranded as Windows 7 (which amazingly illustrates the gap, 7 here : 10 there) is not going to win them a lot of sympathy either.

No matter if one likes this guy or not, his lack of vision and direction is stunning.

There are four platform (os and hardware) manufacturers, Palm, Apple, RIM and Nokia. And then there's also (I think) four licensable/open mobile operating systems, Symbian, Android, and LiMo, Windows Mobile. (Nokia who makes their own devices, also owns Symbian. And of course, Windows Mobile is the only mobile OS that is not royalty-free.)

Windows Mobile directly competes with other licensable/open mobile operating systems. Their customers are handset manufacturers and service providers, so Steve has somewhat of a point, except that he appears to think that this is the only "real" market, as if all that money made in the consumer market is fake and unsustainable.

So while the iPhone is technically not a Windows Mobile competitor, dismissing it as a non-competitor is a huge mistake, especially considering how much of threat it actually is! As of Oct-2008, Apple surpassed Windows Mobile in the bigger, overall smartphone market; taking a larger slice of the pie. (And that doesn't even count how many iPod touches were sold, which pushes the iPhone OS platform into even more consumers hands.)

And he talks about how Windows Mobile will remain unchanged until the end of the year during the same time frame Palm releases the Pre and WebOS, and surely Apple will release iPhone OS 3.0, and a third generation iPhone to go with it and possibly even a second model.

There are four platform (os and hardware) manufacturers, Palm, Apple, RIM and Nokia. And then there's also (I think) four licensable/open mobile operating systems, Symbian, Android, and LiMo, Windows Mobile. (Nokia who makes their own devices, also owns Symbian. And of course, Windows Mobile is the only mobile OS that is not royalty-free.)

Windows Mobile directly competes with other licensable/open mobile operating systems. Their customers are handset manufacturers and service providers, so Steve has somewhat of a point, except that he appears to think that this is the only "real" market, as if all that money made in the consumer market is fake and unsustainable.

So while the iPhone is technically not a Windows Mobile competitor, dismissing it as a non-competitor is a huge mistake, especially considering how much of threat it actually is! As of Oct-2008, Apple surpassed Windows Mobile in the bigger, overall smartphone market; taking a larger slice of the pie. (And that doesn't even count how many iPod touches were sold, which pushes the iPhone OS platform into even more consumers hands.)

And he talks about how Windows Mobile will remain unchanged until the end of the year during the same time frame Palm releases the Pre and WebOS, and surely Apple will release iPhone OS 3.0, and a third generation iPhone to go with it and possibly even a second model.

Originally posted by Shades047:Yeah, it's one thing to talk up your company, it's another to appear so completely out of touch. The iPhone isn't a competitor, but Android is? Seriously?

The iPhone isn't a competitor for Microsoft. It certainly is a competitor for LG, Samsung, et. al., but, since Microsoft doesn't sell an end-user product in that arena, but merely provides an OS to OEMs, which Apple is not doing, it's simply not competing in the same space. Neither is RIM, for that matter. Android is competing in that same space, and that's what makes it a competitor.

Of course, by that same definition, Apple isn't really a competitor for their desktop OS either (unless you count Hackintoshes). So it's entirely possible Steve-O is talking completely from his ass here.

Who cares which platform/OS competes with which? Mobile phone buyers certainly don't. At the end of the day, there will be companies that make sustainable profits and companies that don't in this overall market. Motorola, for example, has hardly been mentioned, yet by some contrived metric they're probably #1 in some specific market segment. What about Danger/Sidekick? Are they a viable competitor? The answer would be N-O.

So if WinMo wants to be among the top three in overall mobile phone significance at the end of 2010, Ballmer has to start looking at the real competitors, not the bogus ones he focuses on in tortured interviews and analyst calls. No one should understand that better than Ballmer, so he's just buying time at this point.

Michael Tomlin, I don't know what crack you are smoking, but the iphone by no means surpassed windows mobile in market share. They might have sold more IN A SINGLE MONTH, but considering that over 20 million windows mobile phones sold last year, and at last estimate, the iphone has sold about 17.4 million total (source), how, exactly, the iphone has a larger market share is sort of...confusing.

Then there's nokia who is so far out in front at the moment it's a joke. Counting just N and E series phones, over 11 million were sold last quarter alone. That doesn't include all of the other phones Nokia sells with s60 installed, such as the 61xx series, or the 5800 -- which sold over a million units all by itself when it was only available in a few smaller markets such as russia and hong kong. Now that the 5800 is available in mainland china, india, and most of europe, these numbers will only climb.

As I said before, I have no problem with what platform any particular person chooses. But claiming the iphone has a larger market share than windows mobile is ludicrous. And yes, I understand that you might think gartner claims otherwise, but their claim was that apple was ahead of winmo in sales in 3Q 2008 only. Just keep in mind that the market has been around a lot longer than that...

Originally posted by heartburnkid:The iPhone isn't a competitor for Microsoft. It certainly is a competitor for LG, Samsung, et. al., but, since Microsoft doesn't sell an end-user product in that arena, but merely provides an OS to OEMs, which Apple is not doing, it's simply not competing in the same space.

Except that if he sees Apple a competitor for the desktop, where exactly the same circumstances apply, then the only conclusion that can be drawn is that Ballmer is talking out of his ass (again).

Firstly - TheFerenc - yes, he means in a single quarter or month, but the iPhone's market share is growing, so in future months its expected to extend its lead - meaning that more and more people are buying it. So its a valid milestone - now ongoing sales of iPhones outstrip WinMo and will continue to do so.

I think with Ballmer, he's obviously not where is by being an idiot. Its distorting the truth, but clearly he's categorizing the iPhone as something else that they aren't going to compete directly with.

And when he says all the action is with WinMo and Android - well what the hell else are other manufacturers going to do? iPhone is closed, so device manufacturers _can't_ use it, and Symbian is another proprietary system supported by a device manufacturer, so _somewhat_ closed.

So in the market which doesn't include Apple as a direct competitor, yes I suppose he's right to say they don't compete.

Wow. I hope Ballamer someday, somehow, gets the chance to try out one of his WinCE phones. I had an HTC Wizard that I tried to use as anything beyond a phone, and it was almost, but not quite, entirely useless. You can still take notes with Portable Word, once you find 3rd party software to create a new file.

The internal Wifi on that phone only supports WEP, but wait, MS has a service pack to fix that! The service pack, however, is not directly offered by MS. Instead, they offer it to the HW manufacturer, which then offers it to the network, which then MAY consider offering it to the public. If the HW manufacturer is more interested in selling a newer model, too bad. The network then may redo their distribution, which includes rebuilding feature lockouts to protect profitable network services. If that mess no longer compiles, or was lost when the responsible intern's system was re-imaged, then the old firmware stands. If a new firmware sneaks through, congratulations! Hurry up and D/L it, because the 3011 model is coming out next week, and any mention of the 3010 will become 404. It's the perfect bureaucratic filter to prevent anything from ever being fixed.

The CE game scene is about as good as any Commodore64 "also ran"; you have to worry about CPUs, color bit depth, and resolution (do I have a 320x240, or 240x320 framebuffer?).

Ignoring standards is strength, EULA is freedom, FUD is peace. Just another hump day in Redmond.

Originally posted by TheFerenc:Michael Tomlin, I don't know what crack you are smoking, but the iphone by no means surpassed windows mobile in market share. They might have sold more IN A SINGLE MONTH, but considering that over 20 million windows mobile phones sold last year, and at last estimate, the iphone has sold about 17.4 million total (source), how, exactly, the iphone has a larger market share is sort of...confusing.

Market share != installed base. Market share is the percentage sold in a given market during a given period of time. Installed base is "how many there are out there being used." During Q3 2008 the iPhone had a larger market share than Windows Mobile phones. Obviously that was just a temporary spike—Windows Mobile obviously has a much larger installed base of phones. They even have a larger market share most quarters.

The point really was that the iPhone and the software ecosystem it represents is a real-world competitor to Microsoft, regardless of Ballmer's hair-splitting about business models.